LOAN PRODUCTS FOR RESIDENTIAL &COMMERCIAL SOLAR PHOTOVOLTAIC SYSTEMSSTATE OF HAWAII Green Infrastructure Authority | GEMS FINANCING PROGRAM

Agenda

Residential Loan Program OverviewResidential Loan ProcessResidential Loan Program

Commercial Loan Program OverviewGEMS Sales SupportGEMS Contacts & Resources

RESIDENTIAL LOAN PROGRAM

OVERVIEW

PartnerResponsibilities

HGIA – Contractor Engagement & Training Installer Training

Dispute Resolution

Installer Compliance

HGIA – Loan Originator Loan Prequalification

LoanApplication

Loan Funding

Concord Servicing – Loan Servicer Borrower Billing

Payment Processing

Collections

Consumer ProgramUpdates- As of September 30, 2017

Over 400 Applications Submitted

83 loans funded totaling over $2.6 million

68 or 81.9% of the loans served the underserved(Based on income that is self-reported by customers, using Area Median income as provided by the U.S. Department of Housing & Urban Development (HUD)

On-Bill Repayment (OBR) Coming Soon!

All approved Interconnections accepted (however, unable to finance energy storage)

GEMSReview

Fixed Interest Rate at 5.99% FICO Score as Low as 600 Accepted 100% Financing – No Money Down 20 Year Fixed Rate Solar Loan Maximum Loan Amount $75,000 No Prepayment Penalties Re-Amortization Allowed Properties held in Trust accepted Competitive Underwriting Guidelines & Rates

EligibleBorrower

All parties named on title to the property must be borrowers on the loan.

The electric utility account must be held by at least one borrower.

Credit approval is based on the highest (used to be lowest) credit score of all co-borrowers.

All Trustees must be co-borrowers.

EligibleProperties

Subject Property must be single family residence located within the service territories of Hawaiian Electric Company (HECO), Maui Electric Company (MECO) or Hawaii Electric Light Company (HELCO)

The property may be fee simple or leasehold. Leased properties must have at least 25 years remaining on the Lease.

Properties held in Trust are eligible.

EligibleProjects

NEM, CGS or CSS Interconnections

System monitoring equipment w/ data access capability

Expected production from system cannot exceed 125% of site usage

Installed costs not to exceed $4.50 per watt.

PVWatts for production validation

PVWatts Calculator Certification

Panels & Inverters must have 20 year manufacturer’s warranty

10 Year Workmanship Warranty

Installer must be GEMS approved

For full eligibility requirements, visit: www.gems.Hawaii.gov/participate-now/installers

Eligible Cost of PV System

Total Installed PV System cost may include: Solar panels, equipment, materials and labor

installation

Required electrical upgrades

Permit fees

Other hard cost and structural improvements may be assessed up to 20% of system cost.

Additional Requirements

Single funding after completion

Financing fee is the greater of $300 or 1% of the LoanAmount

Financing fee to be paid by installer and will be netted at funding

Required system monitoring

GEMS RESIDENTIAL

LOAN PROCESS

Process for TheConsumer

Financing Process - Steps

1. Scope of Work

2. Online application or PaperApplication

3. Pre-Qualification

4. Validation / Qualify Project

5. Approval / Execute Loan Agreements

6. Installation

7. Completion / Verify Improvements

8. Disbursement

1. Scope of Work

Customer requests Solar System from GEMS approved Installers

Installers prepare scope of work for Solar System that meets Product Eligibility criteria.

Process Overview

The HGIA LOAN PROCESS

2. Applying for Financing

On-line Application Process: The credit application is available on the GEMS Homeowner Program pageat, http://gems.hawaii.gov/participate-now/for-homeowners/

• All * fields must be filled in and the applicant must provide an email address. The email address is a security measure, as once an application is submitted, an email will be sent to the borrower as confirmation. This ETS E-sign portal is secure and approved by the State of Hawaii.

• Customers may download and print an application and can be sent by mail or fax to:

Submit by mail or fax to:Hawaii Green Infrastructure Authority

P.O. Box 2359Honolulu, HI 96813Fax: 808-587-3896

Email to: Dbedt.gems@Hawaii.gov

• Printable applications will be available to Installers at the GEMS Hawaii Drop Box.

2. Applying for Financing

2. Applying for Financing

2. Applying for Financing

2. Applying for Financing

2. Applying for Financing

2. Applying for Financing

2. Applying for Financing

2. Applying for Financing

2. Applying for Financing

3. Pre-Qualify

HGIA reviews application

Checks the following:• Consumer Credit Report• Consumer’s Current Utility Bill• Check Eligible Property status

HGIA issues a loan status• Conditional Preapproval - Eligible Borrower and Property• Pending – Requires additional information• Denied – Ineligible Borrower and/or Property

4. Validation & Qualify Project

HGIA Verifies PV system meets Program Eligibility Requirements:

20% Bill Savings System must not exceed 100% of historical use $4.50 Price per Watt

Required documentation from installer: Utility Interconnection application approval NREL PVWatts system verification (print out) PVWatts Calculator Certification (form) Executed Sales Contract

All documentation must meet Program Eligibility Requirements.

4. Validation & Qualify Project

NREL PVWatts system verification: pvwatts.nrel.gov

4. Validation & Qualify Project

PVWatts Calculator Certification Form:

All GEMS loan forms will be available in the GEMS Hawaii Drop Box:

Insert Link

4. Validation & Qualify Project

Executed Sales Contract must include:

System Size (in watts) Total Installed Cost Estimated Year 1 kWh Production Evidence of Monitoring Equipment Manufacturer’s Warranty (20 years on panel & inverter) Workmanship Warranty (10 years) Loan Amount *

* Installer’s contract with the customer must identify the loan amount the customer is seeking. The stated loan amount should be adjusted to account for any required down payment or customer funded contribution to the cost of the installation.

5. Approval / Execute LoanAgreements

Customer receives final approval from HGIA Approved Borrower executes Loan Documents Approved Installer receives notice to proceed Approved Installer is responsible for obtaining

building permits

Note: HGIA must receive executed loan documents prior to issuing a Notice to Proceed.

6. Installation

INSTALLATION

7. Completion /Disbursement

At completion Eligible Installer submits:

A copy of closed permits Executed NEM , DER or other Interconnection Agreement A completion certificate A detailed final invoice/contract

Disbursement occurs once HGIA receives and verifies items above. Payment request is made within two days and paid via ACH or check from HGIA.

7. Completion /Disbursement

Completion Certificate: includes the solar system inventory listing the make, model, and serial number.

Form will be available with all other forms

7. Completion /Disbursement

Detailed Final Invoice/Contract:

The final invoice/contract loan amount must match the original contract loan amount.

If the final invoice/contract amount varies from the original contract, please complete and submit a Change Order.

COMMERCIAL LOAN PROGRAM

OVERVIEW

Design of Commercial Loan Product

• The design included three objectives:1. to collaborate and partner with commercial banks and other

financial institutions;2. to be more flexible and competitive; and3. to fill a market gap with an unconventional financing tool.

• Result: Co-lending structure with a capital stack of private and public debt.• Long-term financing tool complements conventional financing

and provide low-cost, cash flow friendly capital

Loans Made to Investors or Direct to Small Business

Fixed Interest Rates ranging from 4.50% to 7.50% (depending on global cash flow)

Leverages Bank financing (co-lending with conventional financial Institution)

Up to 100% Financing – No Money Down

Up to 20 Year Terms

No Prepayment Penalties

Eligible Off Takers (rate payers)

• Nonprofits• Small Businesses (as defined by theU.S. Small Business Administration’s size standards)

• For profit multi-family projects

EligibleProperties

Subject Property must be located within the service territories of Hawaiian Electric Company (HECO), Maui Electric Company (MECO) or Hawaii Electric Light Company (HELCO)

The property may be fee simple or leasehold. Leased properties must have at least 20 years remaining on the Lease.

GEMS SALES SUPPORT

MarketingToolkit

GEMS CONTACTS & RESOURCES

Contact Information

Hawaii Green Infrastructure Authority (HGIA)

Residential Loan ProgramValerie Kubota

valerie.c.kubota@hawaii.gov

808-587-2760

Commercial Loan ProgramRyan Hamadon

ryan.r.hamadon@hawaii.gov

808-587-3829